Planet Fitness membership losses ‘significant’ after transgender situation

Planet Fitness has admitted it suffered a “pretty significant” drop in membership after one of its gyms sparked a media storm by allowing a transgender customer to shave in the women’s locker room – and the company plans to increase prices by 50%.

Executives cut their sales and profit forecasts Thursday, blaming in part the March 11 incident at a Planet Fitness in Fairbanks, Alaska, which went viral after outraged member Patricia Silva posted a video on the confrontation with the transgender client.

“The first part of March was pretty good,” Chief Financial Officer Tom Fitzgerald said Thursday after reporting weaker-than-expected first-quarter revenue.

“And then once social media blew up about our political issue, we definitely saw a change in the results in the second half of March. Joins and undoes were quite significantly affected.

The company ended the quarter with 19.6 million members, an 8% increase from last year, which fell short of internal expectations, according to DA Davidson analyst Linda Bolton Weiser. The company also saw a double-digit decline in website traffic, Bolton Weiser said in a research note.

“I hope that Planet Fitness members everywhere continue to cancel their memberships until this woke organization “chooses” to care enough about the rights of women and children and remove men from locker rooms women,” Silva told The Post on Friday.

Planet Fitness said it now expects this year’s revenue to increase 4% to 6%, compared to its previous estimate of 6% to 7%. It expects profits to rise between 7% and 9%, compared to its previous estimate of a 10% to 11% increase.

Craig Benson, interim chief executive of the country’s largest gym chain, which operates 2,500 locations, echoed his CFO.

“Media mentions of the incident peaked in mid-March, which we believe contributes to some of the weakness we saw in joins for the rest of the month as well as some increase cancellations,” Benson said.

He added: “The good news is that we have seen joins rebound, but cancellations have remained high. »

Yet the company, famous for its cheap $10 membership fee, said it would raise prices to $15 for new members starting in the summer — the first hike since 1998. Planet Fitness had tested higher prices in some markets before the uproar.

“It will be some time before the price change increases our store margins, as the price increase will only affect new Classic Card subscriptions,” said Fitzgerald, who is retiring in August.

Silva sparked the backlash after taking a photo of the transgender customer in the women’s locker room. She later posted a video in which she said that while the transgender customer was shaving, a young girl was sitting on a bench with a towel wrapped around her and looked uncomfortable or ” scared.”

In response, Planet Fitness revoked Silva’s membership the next day for violating the gym’s policy of taking photos inside the gym. During this time, the company assigned an employee to escort the transgender customer to the women’s locker room.

The company’s decade-old policy allows members and guests to use facilities that “best match their sincere, self-reported gender identity,” the company said.

The decision sparked a nationwide outcry, with the company reportedly receiving dozens of bomb threats across the country. The company’s market value fell by more than $400 million following calls for a boycott.

Benson said Thursday its policy is no different than other gyms, including the YMCA.

Next month, Colleen Keating, who required employees to undergo “unconscious bias training” and supported “DEI-minded hiring” at her former company, will replace Benson as the new CEO.

In September, longtime CEO Chris Rondeau was unexpectedly ousted. In February, he left the board as the company cut 9% of its workforce.